Canada's Freeland returning to Washington for NAFTA talks as time runs short

OTTAWA (Reuters) - Canadian Foreign Minister Chrystia Freeland on Monday said she would return to Washington, this week for fresh talks on NAFTA as time is running very short to meet a U.S. demand for a deal by October 1.

Freeland, speaking after a phone conversation with U.S. Trade Representative Robert Lighthizer, said a date for the latest round had not yet been set.

Although the two have met in Washington in each of the last three weeks, officials are still seeking common ground on major issues in the trilateral North American Free Trade Agreement.

“We agreed we would continue to talk in Washington later this week ... there are some conversations it’s better to have face-to-face and I think it’s absolutely the right thing for us to meet this week,” she told reporters, without giving details.

U.S. President Donald Trump last month announced a side deal with Mexico and has warned Ottawa that he is prepared to leave Canada out if it fails to accept terms more favorable to the United States. {nL2N1VY10K]

Washington wants the text of a deal by Oct. 1 so the pact can be signed by the outgoing Mexican administration. Canadian officials say though that they will not be rushed, given the size of the obstacles.

Prime Minister Justin Trudeau, who has repeatedly said that he is prepared to walk away from NAFTA rather than sign an unsatisfactory deal, later said the two sides were moving toward what he called “a decision point” on the treaty.

“We’re not there yet ... we might be days or weeks away now, it might not be,” he said during a live televised interview with Maclean’s magazine.

The two nations are trying to solve differences over dispute resolution mechanisms and deal with a U.S. demand for more access to Canada’s protected dairy market.

Earlier on Monday, Trudeau said Canada would stand up for the so-called supply management system of import tariffs and production limits that ensure high prices for dairy, egg and poultry products.

“We have been very very clear - we will protect supply management,” Trudeau told legislators.

That said, Canadian officials say privately that Ottawa will most likely offer U.S. producers more access to the market.

This alarms the powerful dairy industry, which requested a meeting with Freeland last week. She said the two sides had a long and good conversation but gave no details.